Premier(US:PINC)2025-11-04 13:58Financial Performance - Net revenue for the three months ended September 30, 2025, was $240,004, a decrease of 3.4% from $248,142 in the same period of 2024[19]. - Gross profit for the same period was $170,597, down from $180,418, reflecting a decrease of 5.4%[19]. - Operating income decreased significantly to $24,884, compared to $35,315 in the prior year, representing a decline of 29.5%[19]. - Net income from continuing operations was $15,287, a decrease of 79.0% from $72,940 in the previous year[19]. - Basic earnings per share attributable to stockholders was $0.21, down from $0.71, indicating a decline of 70.4%[19]. - Total operating expenses for the quarter were $145,713, slightly up from $145,103, indicating a marginal increase of 0.4%[19]. - The company reported a comprehensive income attributable to stockholders of $17,554, down from $70,805, a decline of 75.2%[19]. - Segment Adjusted EBITDA for Supply Chain Services was $76.174 million, down 1.7% from $77.511 million in the prior year[116]. - Performance Services segment reported a Segment Adjusted EBITDA of $10.622 million, a decline of 29.0% from $14.949 million in the same quarter of 2024[116]. Assets and Liabilities - Total assets decreased from $3,097,074 thousand as of June 30, 2025, to $3,051,371 thousand as of September 30, 2025, representing a decline of approximately 1.5%[17]. - Cash and cash equivalents decreased significantly from $83,725 thousand to $43,380 thousand, a reduction of about 48%[17]. - Accounts receivable decreased from $99,092 thousand to $87,460 thousand, reflecting a decline of approximately 11.7%[17]. - Total current liabilities decreased from $910,633 thousand to $854,769 thousand, a decrease of about 6.1%[17]. - Stockholders' equity slightly decreased from $1,530,577 thousand to $1,528,273 thousand, a marginal decline of approximately 0.1%[17]. - The Company’s total investments in unconsolidated affiliates amounted to $259.261 million as of September 30, 2025, down from $262.621 million on June 30, 2025, reflecting a net loss of $3.358 million during the quarter[52]. - The net carrying value of intangible assets decreased from $250.770 million on June 30, 2025, to $237.694 million on September 30, 2025[75]. - The Company had no long-term debt as of September 30, 2025, with a total current portion of debt and notes payable of $280 million[79]. Cash Flow and Investments - Cash and cash equivalents at the end of the period were $43,380, down from $86,956, reflecting a decrease of 50.1%[24]. - Net cash provided by operating activities was $15,858, a decrease of 76.6% from $67,647 in the same period last year[24]. - The Company recognized $12.2 million in revenue during the three months ended September 30, 2025, from performance obligations satisfied from the opening balance of deferred revenue[65]. - As of September 30, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $796.8 million, with an expectation to recognize approximately 38% over the next twelve months[70]. - The Company’s earn-out liabilities decreased from $7.706 million on June 30, 2025, to $6.900 million on September 30, 2025, due to adjustments related to the IllumiCare acquisition[61]. - The Company had $280.0 million in outstanding borrowings under the Credit Facility as of September 30, 2025, with $715.0 million of available borrowing capacity[81]. Mergers and Acquisitions - The Company announced a definitive agreement to be acquired by Patient Square Capital for $28.25 per share in cash, totaling approximately $1.1 billion based on outstanding shares[31]. - The acquisition of IllumiCare, Inc. was completed for a preliminary adjusted purchase price of $46.7 million, with $39.8 million paid in cash on hand[37]. - The IllumiCare acquisition includes potential additional earn-out payments of up to $15.0 million over three years based on performance goals[37]. - The divestiture of the direct sourcing business resulted in a loss of $53.0 million, with the fair value of the equity received in Prestige valued at $24.9 million[38]. - The Merger Agreement is subject to customary closing conditions, including majority shareholder approval and regulatory clearances[32]. - The Company will pay a termination fee of $66.2 million if the Merger Agreement is terminated under specified circumstances[35]. - Parent will pay a termination fee of $168.6 million if the Company terminates the Merger Agreement due to Parent's uncured breach[36]. Operational Risks and Strategies - The company reported a significant reliance on administrative fees from suppliers, which is critical for maintaining and adding new group purchasing organization (GPO) members[10]. - The company is facing risks related to the proposed merger with an affiliate of Patient Square Capital, including potential delays in regulatory approvals and market disruptions[10]. - The company’s ability to maintain third-party provider alliances is crucial for its operational strategy and market position[10]. - The company is focusing on integrating artificial intelligence into its products, which poses both opportunities and risks due to the evolving technology landscape[10]. - The company is exposed to financial and operational risks associated with non-controlling investments in early-stage companies, which could impact future performance[10]. Shareholder Returns and Compliance - The Company repurchased approximately 19.9 million shares of Common Stock under the 2024 ASR Agreement at an average price of $20.12 per share[91]. - The Company paid cash dividends of $0.21 per share on outstanding shares of Common Stock on September 15, 2025[96]. - Income tax expense on continuing operations for the three months ended September 30, 2025, was $1.7 million, reflecting an effective tax rate of 10%[105]. - Stock-based compensation expense for the three months ended September 30, 2025, was $8.165 million, with a net expense of $6.596 million after tax benefits[104]. - The Company was in compliance with all covenants under the Credit Facility as of September 30, 2025[80]. Lease Obligations - As of September 30, 2025, total future minimum lease payments amount to $59.628 million, with operating lease liabilities totaling $46.989 million[108]. - Future lease payments for 2026 are projected at $6.337 million, with a total of $26.473 million due thereafter[108]. Legal and Regulatory Matters - The company is not currently involved in any material litigation that could adversely affect its business[110]. - The company operates through two segments: Supply Chain Services and Performance Services, with the former including GPO and supply chain solutions[113].